Long-Term Periodic Payment Obligation

In an assigned case, the defendant or property/casualty company does not wish to retain the long-term periodic payment obligation on its books. Accordingly, the defendant or property/casualty insurer transfers the obligation, through a legal device called a qualified assignment, to a third party. The third party called an assignment company will require the defendant or property/casualty company to pay it an amount sufficient to enable it to buy an annuity that will fund its newly accepted periodic payment obligation. If the claimant consents to the transfer of the periodic payment obligation , the defendant and/or its property/casualty campany has no further liability to make the periodic payments. This method of substituting the obligor is desirable for defendants or property/casualty companies that do not want retain the periodic payment obligation on their books. A qualified assignment is also advantageous for the claimant as it will not have to rely an the continued credit of the defendant or property/casualty company as a general creditor. Typically, an assignment company is an affiliate of the life insurance company from which the annuity is purchased.